Egypt: Will tourists come back to the rescue of an ailing economy?

In 2010, Egypt ranked among the 20 top tourism countries in the world with a honourable 18th place. A year later, the Arab spring swept over Egypt, scaring away the 14 million international tourists who visits the country yearly.

In 2011, the revolution that toppled President Hosni Moubarak dealt a serious blow to the tourism sector, which was one of the pillars of Egyptian economy as it generated US$ 13 billion in receipts in 2010 and was source of income for approximately 20 percent of the labor force in the country. According to some figures, the sector was reportedly employing one in eight working Egyptian.
Following the pro-democracy movement that erupted on January 25, 2011, arrivals dropped by 32 percent that year.
Some commentators underline that this is the most serious crisis the sector has ever gone through. It is true that the Egyptian tourism industry suffered some setbacks in the past because of sporadic terrorist attacks but the crises were ephemeral. This time the negative impact of the streets upheaval seems deeper. The coming to power of an Islamist president, a former figure of the Islamic brotherhood, was not to bring any breakthrough as would be visitors do not know yet if the new government would be tempted to implement tighter rules on the dress code, night clubs, swimming in beaches etc.
Muhammad Morsi, in his first speech after taking office, actually expressed his support for the tourism sector, one of the leading foreign exchange earners and job creators in the country, pledging to encourage investment in all sectors and “restore the role of tourism for the benefit of the Egyptian economy and every citizen in Egypt.”

Probable ban on alcoholic bevereages?

Unofficial statements released by Islamist figures or Muslim Brotherhood members have however created a state of controversy over the possible application of certain conservative traditions, such as imposing restrictions on visitors’ dress code, banning the sale of alcoholic drinks and even banning beach bathing at a time beach tourism makes up for the majority of the industry’s revenues.
These suggestions have deeply worried tour operators as well as the millions of Egyptian earning a living on the sector and have drawn a sharp response from politicians from across the spectrum who warned that imposing restrictions on visitors would add to the insecurity of the sector.
Egyptian officials are nonetheless showing optimism as to a recovery of the sector affirming that tourists from all over the world will return to Egypt before year’s end. They are pinning hopes on Asian tourists, mainly Japanese. In this regard, the Tourism ministry has succeeded in resuming flights between Cairo and Tokyo and is planning to operate a Cairo-Osaka air route to increase the number of visiting Japanese.
They are also expecting a bigger influx in the number of tourists from Eastern Europe, mainly Russia and Poland, as well as from Germany and Great Britain.
Part of their efforts to stimulate the sector, officials reopened a portion of Egypt’s Nile River between Cairo and Luxor to cruise ships end of August after this stretch has been closed since 1994 due to security concerns over risk of terrorist attacks.
The event was marked by a reception attended by minister of tourism, Hisham Zazou, who hailed the resumption of cruising on the Nile between Cairo and Luxor as “a new product vis-à-vis tourist sites that have been off the map for so many years.”
He also hailed the positive economic impact that the cruising resumption will have on the whole Nile basin.
Similarly, Egyptian authorities are also trying to promote the charter flights to southern Egypt, especially to Aswan International Airport, hoping to reinvigorate cultural tourism in that part of the country.
The optimism expressed by Egyptian officials finds an echo in the figures released lately by the World Tourism Organization which is predicting international tourism to reach one billion tourists by the end of the current year.
Despite concerns over the global economy, international tourism demand continues to show resilience. The number of international tourists worldwide grew by 5 percent between January and June 2012 compared to the same period of 2011 (22 million more). Although a slight slowdown in growth can be expected for the rest of the year, international arrivals are forecast to exceed one billion by the end of 2012, the UNWTO said in a recent release.
“Amid the current economic uncertainty, tourism is one of the few economic sectors in the world growing strongly, driving economic progress in developing and developed countries alike and, most importantly, creating much needed jobs,” said UNWTO Secretary-General, Taleb Rifai, during the Global Tourism Economy Forum held in Macao September 9 to 11.
According to the organization, international arrivals were up in all regions between January and June 2012 and the rebound of Egypt is clearly mirrored in the results of the Middle-East which recorded a slight 0.7 percent increase.
In 2011, receipts from international tourism, including international passenger transport, (exports from tourism) totalled US$ 1.2 trillion or close to 6 percent of the world’s exports of goods and services, according to the UNWTO.
If the UNWTO predictions turn out to be right, for Egypt, tourists may just be the welcomed rescuers to an economy that is facing deep troubles.